Podcast
Questions and Answers
What is the key difference between strategic alliances and joint ventures?
What is the key difference between strategic alliances and joint ventures?
- Strategic alliances do not form new business entities, joint ventures do. (correct)
- Joint ventures reduce labour costs, strategic alliances focus on efficiency.
- Strategic alliances involve only one company, joint ventures involve multiple companies.
- Joint ventures are focused on cost-saving, strategic alliances prioritize leadership talent.
Which best describes a multinational corporation?
Which best describes a multinational corporation?
- A corporation with production plants only in one country.
- A corporation that outsources all operations to a single country.
- A corporation operating in multiple countries to save costs. (correct)
- A corporation focused solely on offshoring.
What is the primary purpose of offshoring for companies?
What is the primary purpose of offshoring for companies?
- To reduce the cost of labour by relocating operations to another country. (correct)
- To increase labour costs in high-cost countries.
- To consolidate all operations in one country for efficiency.
- To be close to emerging markets for better opportunities.
What is a common reason for companies to engage in mergers?
What is a common reason for companies to engage in mergers?
How do most businesses ensure ethical behavior among their workers?
How do most businesses ensure ethical behavior among their workers?
What defines a retail business?
What defines a retail business?
What is a domestic transaction?
What is a domestic transaction?
What benefits can businesses gain from international trade?
What benefits can businesses gain from international trade?
Which type of business generates profit by doing something for other businesses or customers?
Which type of business generates profit by doing something for other businesses or customers?
What is a key advantage of international markets for producers?
What is a key advantage of international markets for producers?
What distinguishes non-profit organizations from other types of businesses?
What distinguishes non-profit organizations from other types of businesses?
Under what financing method does one use their savings or investor savings to run a business?
Under what financing method does one use their savings or investor savings to run a business?
How does international trade impact labor costs in developing countries?
How does international trade impact labor costs in developing countries?
Why might some businesses prefer producing goods in countries with less strict environmental regulations?
Why might some businesses prefer producing goods in countries with less strict environmental regulations?
What is the primary advantage of joint ventures in international business structures?
What is the primary advantage of joint ventures in international business structures?
What is the purpose of using tariff barriers in international trade?
What is the purpose of using tariff barriers in international trade?
How do non-tariff barriers impact international trade?
How do non-tariff barriers impact international trade?
What does a trade surplus indicate for a country's economy?
What does a trade surplus indicate for a country's economy?
How do tariff barriers impact the prices of imported goods?
How do tariff barriers impact the prices of imported goods?
What are some examples of non-tariff barriers to international trade?
What are some examples of non-tariff barriers to international trade?
What is the key advantage of a sole proprietorship?
What is the key advantage of a sole proprietorship?
What is the main disadvantage of a sole proprietorship?
What is the main disadvantage of a sole proprietorship?
Which type of partnership has partners with unlimited liability for each other's debts?
Which type of partnership has partners with unlimited liability for each other's debts?
What are the two types of partnerships mentioned?
What are the two types of partnerships mentioned?
In international business, what does interdependence mean?
In international business, what does interdependence mean?
What distinguishes a private corporation from a public corporation?
What distinguishes a private corporation from a public corporation?
What defines a crown corporation?
What defines a crown corporation?
In what aspect do franchises differ from other business structures?
In what aspect do franchises differ from other business structures?
What is a distinctive feature of municipal corporations?
What is a distinctive feature of municipal corporations?
What is the main goal of most businesses?
What is the main goal of most businesses?
What defines an entrepreneur?
What defines an entrepreneur?
What do economic resources, or factors of production, refer to?
What do economic resources, or factors of production, refer to?
Which type of economic resource refers to materials that come from the earth, water, and air?
Which type of economic resource refers to materials that come from the earth, water, and air?
What is the distinction between a need and a want?
What is the distinction between a need and a want?
Which term describes a product that is no longer used or produced?
Which term describes a product that is no longer used or produced?
What do entrepreneurs do in response to competition?
What do entrepreneurs do in response to competition?
What role do human resources play in creating goods and services?
What role do human resources play in creating goods and services?
What is the primary impact of competition on innovation in businesses?
What is the primary impact of competition on innovation in businesses?
Study Notes
Strategic Alliances
- Agreements between businesses to achieve common objectives without forming a new business entity
- Each business commits resources to achieve a shared goal
Multinational Corporations
- Corporations operating in more than one country
- May operate in multiple countries to save money, e.g., by having production plants in countries with cheap labor
- Examples: having headquarters in a country with good leadership talent
Offshoring
- Relocation of a company's operations to another country, often to reduce labor costs
- Popular offshoring destinations: India (call centers and IT work) and China (manufacturing)
- However, as China develops, labor costs are rising, and manufacturers are moving to Southeast Asia
Mergers
- Two companies joining to form one company
- Reasons for merging: increasing efficiency in the face of competition
- Examples: AOL-Time Warner and Chrysler-Daimler-Benz
Business Ethics
- Ensuring workers behave ethically through a code of ethics
- A code of ethics outlines how employees should respond in certain situations
- Fraud: the crime of lying and deceiving for personal gain
Types of Businesses
- Retail businesses: generate profit by selling goods
- Manufacturing businesses: generate profit by turning raw materials into finished products
- Service businesses: generate profit by doing something for other businesses or customers
- Non-profit organizations: goal is not to make a profit, e.g., charities
Financing Options
- Debt financing: borrowing money to run a business
- Equity financing: using one's own savings or investor savings to run a business
International Business Structures
- Joint ventures: two businesses join to create a separate business entity
- Examples: Sony-Ericsson
International Trade
- Benefits:
- Access to markets
- Cheaper labor
- Increased quality of goods
- Increased quantity
- Access to resources
- Costs:
- Human rights and labor abuses
- Environmental degradation
Barriers to International Trade
- Tariff barriers: taxes on certain imports
- Non-tariff barriers: standards for the quality of imported goods
- Examples: limiting imports to protect local industries or prohibit certain goods
Balance of Trade
- Relationship between a country's total imports and total exports
- Trade deficit: paying more for imports than earning from exports
- Trade surplus: earning more from exports than paying for imports
Forms of Business Ownership
- Sole proprietorship: owned by one person, advantages: keeping all profits, disadvantages: unlimited liability
- Partnership: owned by two or more partners, advantages: shared responsibilities, disadvantages: unlimited liability
- Corporation: distinct legal status, owned by shareholders, advantages: limited liability, disadvantages: complex structure
- Co-operatives: owned by members or workers, primary interest is to serve members, not to make a profit
- Franchises: one business licenses its name, procedures, and expertise to another business
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a multiple choice practice for Wednesday test
